Taxpayers overpaid about $1.27 billion for the allergy drug EpiPen over a decade, far more than the $465 million the drug’s manufacturer previously reported.
Sen. Chuck Grassley, R-Iowa, said Medicaid gave EpiPen maker Mylan too much money from 2006 to 2016 because Mylan misclassified the allergy antidote. The Obama administration also failed to adequately fix the issue, he added.
“The fact that the EpiPen overpayment is so much more than anyone discussed publicly should worry every taxpayer. Mylan and the Obama administration reportedly were close to settling the overpayment for much less than $1.27 billion,” Grassley said. The Senate Judiciary Committee chairman learned the figure from the Department of Health and Human Services Office of Inspector General.
Mylan reached a potential deal with the Justice Department last year in which it agreed to pay $465 million to settle allegations of receiving too much money from Medicaid’s rebate program. The settlement hasn’t been finalized yet.
Under the program, Medicaid gets a rebate from drug makers in exchange for offering their products. The rebate differs based on whether the drug is a cheaper generic or a brand name product.
A brand name product has to provide a waiver about 23 percent of the drug’s average cost, while a generic has to provide only 13 percent.
Mylan had classified the EpiPen as a generic. While the drug’s active ingredient epinephrine is a generic, Mylan considers the drug as a brand name product because of its proprietary auto injector.
Grassley said the Centers for Medicare and Medicaid Services had warned Mylan several times about the misclassification of the EpiPen, but the company did nothing.
“The government needs to do a much a better job of holding companies to their commitments in federal healthcare programs,” he said in a statement. “It appears the Obama administration failed to use all available tools to hold Mylan accountable.”
Mylan did not return a request for comment.
